Germany’s leading financial watchdog recently issued an alert about the risks faced by overseas traders seeking online trading activity, particularly in the grey field of the nation’s digital currency market.
Another company has been labelled with a red flag by BaFin. AlpenFX Ltd, according to the independent authority, is doing unlawful business without having received right permission. The company reportedly gives German clients CFDs that allow them access to FX and digital currency products.
The regulator also stated that, “The operator of the platform is thus conducting proprietary trading dealing on own account within the meaning of section 1 (1a) sentence 2 no. 4 (c) of the KWG on a commercial basis. Neither the trading platform nor its operator hold the authorisation required under section 32 (1) of the KWG and are therefore conducting unauthorised business,”
AlpenFX is accused of being a suspicious organization by the BaFin because contract papers are labeled with a German Office at Hanau Freigerichtstrae 23. This creates the impression that it has German credibility, that has never been the case.
AlpenFX reports to be headquartered in Germany, with branches in London and Cyprus, as per the regulator, which appears to be fraudulent. In any case, the financial regulator advised people to be vigilant and follow proper identification protocols, including verifying the identity of the firm (identity information, nation of formation, and so on) and never trusting a business that cannot be lawfully established.
BaFin is paying attention to cryptocurrencies
To deter such activities, BaFin released a series of recommendations advising prospective investors to be careful of offers of excessive profits.
BaFin has been consistent in its recommendations to customers, remarking on the possible dangers involved with the thriving business, in an effort to keep up with the growth of the cryptocurrency world, such as the number of exchange sites and consumers.
At the end of 2019, when the latest Anti-Money Laundering (AML) rules went into force, cryptocurrency companies working in Germany have had to register for a permit with BaFin, the country’s financial regulator. While derivatives concerning cryptoassets will be exempt from this plan, they will also be liable to ESMA’s current limitation and any potential regulations by BaFin on the selling of these products to retail investors.